Your Guide to AI & Fundraising: Everything You Need to Know

June 10, 2024
5 min read
Full name
11 Jan 2022
5 min read

Artificial intelligence or AI is changing the world we know in countless ways. It already appears in our daily lives from how we shop online (hello, Amazon) to how we consume media (think Facebook, Instagram, Spotfiy, etc.) to how we work. Many applications, such as Notion, Miro, and Canva, have incorporated AI into their tools to enhance their solutions and help you further streamline your day-to-day tasks. And nonprofit fundraising is no exception.

Nonprofits can use AI tools to help with donor identification, outreach, and stewardship. In this guide, we’ll cover everything you need to know about AI and fundraising. Learn about the types of AI and how it's employed in fundraising, discover the benefits of AI, the considerations to keep in mind when leveraging AI, and how you can get started with the right tools.

Jump into one of the section below to get started.

AI for fundraising increases productivity

What is AI and why is it important for nonprofit fundraising?

AI is short for Artificial Intelligence and is a form of computer science that simulates human intelligence. Machines are programmed to think, learn, and problem solve like humans. This can take a variety of forms such as machine learning, natural language processing, and robots.

You might be thinking, that’s great and all but why does it matter to nonprofits? AI can level up a nonprofit’s fundraising program by taking on some of the tedious, time-consuming administrative tasks that bog down your day-to-day. But it doesn’t stop there. AI can also help analyze and predict donor behavior, generate content, and identify high-priority donors.

Before we get into all of the benefits, let’s go over the different types of AI that show up in nonprofit fundraising tools, including:

Machine Learning

Machine learning is a type of AI that focuses on the creation of algorithms and models so computers can learn and make predictions based on data. Typically, predictive AI and reinforcement learning fall into this category.

How it can help fundraisers: By analyzing and interpreting large quantities of data, AI can help you understand a donor’s propensity to give, how a donor wants to be communicated with, and whether or not a donor’s engagement is slipping.

Generative AI

Generative AI creates (or generates) content using existing data and information. You’ve probably heard of ChatGPT3 and GoogleBard, which utilize generative AI to create responses to prompts. Generative AI can include writing text and generating images.

How it can help fundraisers: Generative AI can help reduce some of the legwork required for donor outreach and communications. By having AI craft emails and thank you notes to donors, you can reduce the amount of time it takes to create those communications. However, it’s always a good idea to double check the content before sending it to donors.

Natural Language Processing

Natural Language Processing (NLP) enables computers to understand, interpret, and generate language in a natural way. This includes speech to text transcription, sentiment analysis, and answering questions posed in natural language.

How it can help fundraisers: NLP enables AI to respond and create content that sounds like a human. It also allows fundraisers to send voice messages for AI to transcribe and helps you understand the underlying sentiment of a conversation (such as positive, negative, neutral).

The Many Benefits of AI to Fundraisers

AI tools can help fundraisers save time, identify potential donors, generate content, and so much more.

Better understand your donors: AI can help you create donor profiles by looking at your donor’s giving history, wealth screening, behaviors, and interests. This helps you immediately understand your donor and their general background.

Quickly identify major donors: By reviewing each donor that enters your organization’s funnel, AI can help identify which donors have the potential to be mid-sized or major donors.

Predict donor behavior: By analyzing large datasets, AI can help predict donor behavior and a donor’s likelihood to give. This helps you prioritize who you should be contacting and building relationships with.

Generate personalized content: AI reviews your communication style and that of your donors to help craft content that engages and resonates with donors. Instead of writing one-off emails for each donor in your portfolio or sending bulk email sends with minimal personalization, AI can help you write individualized communications at scale.

Automate administrative tasks: Fundraisers are often buried under manual, administrative tasks, such as updating contact reports, adding information to a CRM, or sorting through donor lists. With AI tools, information can automatically be updated to CRMs, call summaries added to contact reports, and donor outreach is prioritized for you.

Prevent burnout: Between staffing shortages and high turnover, nonprofit professionals have a high rate of burnout. (According to a 2022 survey by Opportunity Knocks, 30% of nonprofit professionals are burnt out!) ****AI can act as the fundraising assistant nonprofit professionals desperately need, supporting administrative tasks, copy creation, and data analysis.

AI fundraising benefits

Example: Fundraising and AI in Action With Momentum

To better understand the benefits of AI to nonprofits, it can be helpful to see a real-life example of AI and fundraising in action. Momentum is an AI Donor Engagement platform that utilizes AI at every stage of the donor funnel to help you strengthen donor relationships and streamline tasks.

Research: Momentum’s AI Donor Engagement platform creates a profile for each donor with information such as location, affinity, and communication preferences.

Identify: Once a donor enters your funnel, Momentum scores and ranks each donor based on wealth screening data, affinity, and giving history. If the donor meets certain criteria, the donor will automatically be moved into the major gift officer’s portfolio.

Prioritize: Momentum creates a Custom Donor Plan for each donor, prioritizing high-potential donors and nurturing the donor according to their communication preferences.

Cultivate: Momentum’s AI Fundraising Assistant reviews your writing style and your donor’s communication preferences to craft written communications that sound like you and are personalized to each donor. You always have the opportunity to review the drafted communication before it is sent.

Update: Momentum automatically updates your CRM and contact reports so that you don’t have to copy and paste information between platforms. Each morning, you’ll receive an email in your inbox with your high-priority outreach tasks for the day.

Well being: Momentum was designed with fundraisers' mental well being in mind. We want to remove some of the burden on fundraisers so that you can be the best version of yourself and make the biggest impact possible for your organization.

Take a look at the gif below. On the right, you see Margot Robbie's donor bio. In the center of the screen, there is a recommendation from Momentum to check in on the Barbie movie press tour. You select the option to create an email and your AI Fundraising Assistant draft the copy. You make a couple of tweaks to the copy and it's ready to send.

AI fundraising example

AI in Fundraising: Programmatic Use Cases

AI can span many use cases for fundraising. We’ll dive into a few examples below to help you better picture how AI can aid every aspect of the fundraising ecosystem.

Leadership Giving

AI helps convert your annual donors into mid-level donors by identifying who has greater potential to give. By using AI to regularly engage the donors in your portfolio, you create stronger relationships with these donors, making them more likely to give when asked.

Major Giving

AI helps fundraisers cultivate relationships with major donors by crafting communications personalized to every donor in your portfolio. This allows you to check in with your donors regularly and strengthen relationships with these high-impact donors.

Planned Giving

Relationships are the cornerstone of planned giving and legacy gifts. Using AI, you can have a better understanding of your donors interests, giving history, and propensity to give, providing you with the information to not only better understand your donors but also develop deeper connections with them.

Donor Stewardship

No matter the donation size, AI can help steward your donors. By sending you reminders and prioritized task lists of who to reach out to next, your high-priority donors are always top of mind. Reinforcement learning is an incredible type of machine learning that identifies when donors are losing interest and at risk of churning. This can help you reach out to and reengage donors before it's too late.

What to Look for in AI Fundraising Tools

When considering AI fundraising tools, keep these factors in mind to help you choose the tool that’s right for your organization.

Privacy and Data Protection: AI often relies on large datasets, which raises concerns about privacy and the responsible handling of data. The AI tools you choose should have robust data protection measures in place, including data anonymization, encryption, and adherence to relevant privacy regulations.

Transparency: You need to be able to understand how AI solutions operate and how your data is being utilized. Look for a company that values openness and transparency in their processes and security protocols.

Accuracy: If an AI tool isn’t accurately pulling information, then it isn’t saving you time and effort. Look for tools with high accuracy rates and performance metrics relevant to your specific use case.

Ease of integration: AI tools should be enhancing your experience with the tools you already have. Look for tools that easily integrate with your current workflow so that you’re not copying and pasting information from one system into another.

Scalability and Flexibility: Choose AI tools that can scale and adapt to your needs as your organization grows. Keep an eye out for tools that are consistently making updating, debugging features, and pushing the envelope of what’s next.

Free AI tools for nonprofits

Top AI Fundraising Tools

There are a variety of AI tools that can help you more easily fundraise. Take a look at the options below to determine what might be most useful to you and your team.

Best All-Around AI Tool for Nonprofits: Momentum

Momentum’s AI Donor Engagement Platform helps you streamline your workflow while building better relationships with donors. From an AI Fundraising Assistant that drafts personalized written communications for donors to Custom Donor Plans that are automatically created and updated as you engage with donors, Momentum’s platform enables you to focus your time on the projects that move the needle.

Best AI Tool for Prospect Research: DonorSearch AI

DonorSearch AI combines your nonprofit’s data with DonorSearch’s database to build innovative predictive models. These models help you identify your best donor prospects with much greater accuracy.

Best Free AI Tool: ChatGPT3

The free AI tool, ChatGPT3, is excellent for answering prompts and providing information on a wide range of topics. Be specific in your prompts to receive the best answer possible, and remember to double check advice and facts before publicly sharing the information.

Best AI Tool for Social Media: Buffer

Buffer is a social media management platform that offers an AI assistant to help you scale your social media presence. With Buffer’s AI Assistant, you can generate ideas, craft copy, and repurpose content across platforms.

Best AI Tool for Design: Canva

Canva’s Magic Design is an AI tool that allows you to visualize your designs. By inputting media or text, you’re able to automatically create designs that are personalized to your brand and needs. By providing you with a template and a first draft of your design, you avoid the blank page and can make adjustments as you see fit.

Implementing AI for fundraisers

Best Practices for Implementing AI Tools

When it comes to incorporating AI in your day-to-day work life there are a few best practices to keep in mind.

Remain human-centered: Ultimately, AI should give you the resources and information to help you make more informed decisions, not **make decisions for you. Consider leveraging AI where it can help enhance your decision making

Review your data: In order for AI tools to make the most accurate assessments, the tools need to be referencing clean data. Take a look at your CRM’s data and clean up duplicates data, update outdated contact information, and consolidate similar fields. This will help your AI tool have the most accurate information possible.

Conduct trainings: Just like any new tool, it’s important to know how to use it to the best of its ability. For AI tools in particular, extra measures, such as double checking the work that AI creates, is important before sharing the information publicly.

FAQs on Nonprofit Fundraising and AI

Will AI replace humans at nonprofits?

Absolutely not. People are essential for building relationships and creating meaningful connections. We think of AI as a third hand. If you’re cleaning up the house, it would be amazing to have three hands to help you move more quickly. AI isn’t your replacement, but an extension to help you have a greater impact at your organization.

How can AI be ethically and responsibly used in nonprofits?

Because AI systems perpetuate biases based on the data they are trained on, some AI tools can provide inaccurate information. To ethically and responsibly use AI, look for tools that prioritize bias mitigation, data privacy and security, transparency, and the safe collection of data. Additionally, it’s important to have human oversight of AI tools and ensure that what is being created or leveraged is accurate and aligns with your organization’s mission.

Are there AI tools or resources specifically designed for nonprofits?

Yes, tools like Momentum’s AI Donor Engagement platform are designed specifically for nonprofit fundraisers to build stronger relationships with donors and streamline their workflows. Designed by behavioral psychologists, Momentum was created to reduce stress, motivate, and inspire fundraisers. To learn more about Momentum, explore our platform.

Fundraising support with AI

A Few Key Takeaways for Fundraising and AI

AI is a field that will continue to grow and expand, helping professionals across industries focus on more strategic projects that only humans can accomplish. The social sector is often left behind when it comes to technological advancements, working with software that has not been updated in years (perhaps decades). This will not be the case with AI.

There are a number of AI tools that can help nonprofits scale their programs and mission to drive organizational impact. We encourage you to explore these tools to help you better engage donors, access predictive insights, and minimize the manual, administrative tasks that can take over your day.

As you consider whether AI is right for your program, keep these key takeaways in mind:

AI can be the extra hand you need: While AI can’t run out and grab lunch for the team, it can help you analyze large data sets and take tedious work off of your plate. When the budget for headcount is tight, AI can help you streamline your workflow and prevent burnout among your team.

Cultivate donor relationships: In addition to reducing your tasks, AI can help you learn more about your donors and create personalized communications that resonate with each person in your portfolio.

Prioritize security and transparency: You not only do want to know how your data is being secured but also how it’s being used. Look for tools that follow rigorous security protocols and are transparent about how and where they use your data.

Strengthen your relationships with your donors and remove time-consuming tasks off your plate with Momentum’s AI Donor Engagement Platform. Offering custom donor plans, a personal AI Fundraising Assistant, and predictive insights that help you identify the right donors for your organization, Momentum’s platform will help you drive greater impact for your cause.

Get started today.

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